Unit 1- The Business Environment
Assignment 1 – Types of Businesses
The BBC is the largest broadcasting organisation in the world. Its mission statement is to enrich people lives with programs that inform, educate and entertain. The BBC has the second largest budget of any UK broadcaster with an operating expenditure of £4.23 billion in 2009/2010. The only UK broadcaster with a larger operating expenditure is British Sky Broadcasting with £5.9 billion (http://en.wikipedia.org/wiki/BBC#Finance). The reason that Sky’s operating expenditure is higher is because Sky is a private sector PLC, which means that the public can buy shares in a company. Selling shares means more capital income is invested in the business as people invest their money hoping that the value of their shares will increase. Sky will then use this money from the shares to improve their broadcasting service by offering better quality, more programs and more channels. With the BBC being a public sector organisation it doesn’t have shares therefore the BBC wouldn’t receive more income from selling shares meaning that they have a lower operating expenditure. The BBC is in the public sector meaning that it is owned and funded by government grants which are funded through tax payer’s money, through income tax which in effect means that the taxpayers own the BBC. The public sector is in decline as government have had to cut funds to some government funded public sector services such as the Police service as many local police stations have lost their funding because the United Kingdom is in recession so government have tried to find ways to reduce the countries debt which means reducing costs through reducing funds to some government organisations. The BBC creates £3,446.8 million in license fees collected from householders, £888,3million from BBC Commercial businesses, £293 million from government grants and £112.9 from other income such as providing content for overseas broadcasters through BBC World Service (http://en.wikipedia.org/wiki/BBC#Revenue). The BBC Commercial is made up of BBC Shop which is a multi-channel retailer selling thousands of books, DVDs, audiobooks and toys for fans of the BBC and BBC programmes. BBC Shop sells products online, by phone, post. BBC Worldwide also makes up BBC Commercial. (http://www.bbc.co.uk/aboutthebbc/insidethebbc/whatwedo/commercialbusiness) The BBC World Service broadcasts news and information to the world on radio, TV and online in 32 different languages. Any profits from this are returned to the BBC for investment in new programs and services (http://www.bbc.co.uk/aboutthebbc/insidethebbc/whoweare/ataglance). The BBC is a large business as it has 23,000 staff (http://en.wikipedia.org/wiki/BBC) however it is only international not global because all programs and services are produced in the UK only and are sent out to other countries meaning it is international as goods or services are produced in one country but are then used in other countries. An example of this is the program ‘Top Gear’ it is a UK program produced by the BBC but it is broadcasted in other countries in different languages. In contrast, British Petroleum is a public limited company (PLC) which means that the public can buy shares in BP and become shareholders. A shareholder is an owner of shares in a company. The price of shares in pounds is £461.00 as of the 31st October 2011 this is down £6.20 (http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9026517&contentId=7048504). When shares go down it means that large amounts of shareholders want to sell them. If people don’t want to own the shares it pushes the price that buyers want to buy them at down. Reasons for shares to go down might be because of a company’s action such as the Gulf of Mexico oil spill this led to an increase in the sale of shares because shareholders don’t want to be associated with the BP Corporation. These shares are...